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Power to the people: electricity demand and household behavior
Umeå universitet, Samhällsvetenskapliga fakulteten, Handelshögskolan vid Umeå universitet, Nationalekonomi. (Centre for Environmental and Resource Economics (CERE))
2017 (Engelska)Doktorsavhandling, sammanläggning (Övrigt vetenskapligt)
Abstract [en]

Paper [I] Using a unique and highly detailed data set on energy consumption at the appliance-level for 200 Swedish households, seemingly unrelated regression (SUR)-based end-use specific load curves are estimated. The estimated load curves are then used to explore possible restrictions on load shifting (e.g. the office hours schedule) as well as the cost implications of different load shift patterns. The cost implications of shifting load from "expensive" to "cheap" hours, using the Nord Pool spot prices as a proxy for a dynamic price, are computed to be very small; roughly 2-4% reduction in total daily costs from shifting load up to five hours ahead, indicating small incentives for households (and retailers) to adopt dynamic pricing of electricity.

Paper [II] Using a detailed data set on appliance-level electricity consumption at the hourly level, we provide the first estimates of hourly and end-use-specific income elasticities for electricity. Such estimates are informative about how consumption patterns in general, and peak demand in particular, will develop as households’ income changes. We find that the income elasticities are highest during peak hours for kitchen and lighting, with point estimates of roughly 0.4, but insignificant for space heating.

Paper [III] In this paper, I estimate the price elasticity of electricity as a function of the choice between fixed-price and variable-price contracts. Further, assuming that households have imperfect information about electricity prices and usage, I explore how media coverage of electricity prices affects electricity demand, both by augmenting price responsiveness and as a direct effect of media coverage on electricity demand, independent of prices. I also address the endogeneity of the choice of electricity contract. The parameters in the model are estimated using unique and detailed Swedish panel data on monthly household-level electricity consumption. I find that price elasticities range between −0.025 and −0.07 at the mean level of media coverage, depending on contract choice, and that households with monthly variation in electricity prices respond more to prices when there is extensive media coverage of electricity prices. When media coverage is high, for example 840 news articles per month (which corresponds to the mean plus two standard deviations), the price elasticity is −0.12, or 1.7 times the elasticity at the mean media coverage. Similarly, media coverage is also found to have a direct effect on electricity demand.

Paper [IV] I explore how households switch between fixed-price and variable-price electricity contracts in response to variations in price and temperature, conditional on previous contract choice. Using panel data with roughly 54000 Swedish households, a dynamic probit model is estimated. The results suggest that the choice of contract exhibits substantial state dependence, with an estimated marginal effect of previous contractchoiceof0.96, andthattheeffectofvariationinpricesandtemperatureonthechoice of electricity contract is small. Further, the state dependence and price responsiveness are similar across housing types, income levels and other dimensions. A plausible explanation of these results is that transaction costs are larger than the relatively small cost savings from switching between contracts.

Ort, förlag, år, upplaga, sidor
Umeå: Umeå universitet , 2017. , s. 17
Serie
Umeå economic studies, ISSN 0348-1018 ; 942
Nyckelord [en]
electricity demand, real-time pricing, demand flexibility, elasticity, appliance-level data, end-use, media, contract choice, de-regulated market, household behavior, intermittent electricity production, efficiency, imperfect information
Nationell ämneskategori
Nationalekonomi
Identifikatorer
URN: urn:nbn:se:umu:diva-130933ISBN: 978-91-7601-651-0 (tryckt)OAI: oai:DiVA.org:umu-130933DiVA, id: diva2:1070328
Disputation
2017-02-24, Hörsal D, Samhällsvetarhuset, Umeå, 13:00 (Engelska)
Opponent
Handledare
Tillgänglig från: 2017-02-03 Skapad: 2017-02-01 Senast uppdaterad: 2018-06-09Bibliografiskt granskad
Delarbeten
1. Residential End-use Electricity Demand: Implications for Real Time Pricing in Sweden
Öppna denna publikation i ny flik eller fönster >>Residential End-use Electricity Demand: Implications for Real Time Pricing in Sweden
2016 (Engelska)Ingår i: Energy Journal, ISSN 0195-6574, E-ISSN 1944-9089, Vol. 37, nr 4, s. 141-164Artikel i tidskrift (Refereegranskat) Published
Abstract [en]

Using a unique and highly detailed data set on energy consumption at the appliance-level for 200 Swedish households, seemingly unrelated regression (SUR)based end-use specific load curves are estimated. The estimated load curves are then used to explore possible restrictions on load shifting (e.g. the office hours schedule) as well as the cost implications of different load shift patterns. The cost implications of shifting load from "expensive" to "cheap" hours, using the Nord pool spot prices as a proxy for a dynamic price, are computed to be very small; roughly 2-4% reduction in total daily cost from shifting load up to five hours ahead, indicating small incentives for households (and retailers) to adopt dynamic pricing of electricity.

Nyckelord
Direct Metering, Residential Electricity Demand, Real time electricity pricing
Nationell ämneskategori
Nationalekonomi
Identifikatorer
urn:nbn:se:umu:diva-122825 (URN)10.5547/01956574.37.4.mves (DOI)000385912700007 ()2-s2.0-84991573471 (Scopus ID)
Anmärkning

Originally published in manucript form with the title: Residential End-use electricity demand and the implications for real time pricing in Sweden.

Tillgänglig från: 2016-06-22 Skapad: 2016-06-22 Senast uppdaterad: 2023-03-23Bibliografiskt granskad
2. The hourly income elasticity of electricity
Öppna denna publikation i ny flik eller fönster >>The hourly income elasticity of electricity
2016 (Engelska)Ingår i: Energy Economics, ISSN 0140-9883, E-ISSN 1873-6181, Vol. 59, s. 188-197Artikel i tidskrift (Refereegranskat) Published
Abstract [en]

Using a detailed data set on appliance-level electricity consumption at the hourly level, we provide the first estimates of hourly and end-use-specific income elasticities for electricity. Such estimates are informative about how consumption patterns in general, and peak demand in particular, will develop as households’ income changes. We find that the income elasticities are highest during peak hours for kitchen and lighting, with point estimates of roughly 0.4, but insignificant for space heating.

Nyckelord
Direct Metering, Residential Electricity Demand, Real Time Pricing
Nationell ämneskategori
Nationalekonomi
Identifikatorer
urn:nbn:se:umu:diva-124770 (URN)10.1016/j.eneco.2016.08.014 (DOI)000386402800018 ()2-s2.0-84984940234 (Scopus ID)
Tillgänglig från: 2016-08-24 Skapad: 2016-08-24 Senast uppdaterad: 2023-03-24Bibliografiskt granskad
3. Heterogeneity in price responsiveness of electricity: contract choice and the role of media coverage
Öppna denna publikation i ny flik eller fönster >>Heterogeneity in price responsiveness of electricity: contract choice and the role of media coverage
2017 (Engelska)Rapport (Övrigt vetenskapligt)
Abstract [en]

In this paper, I estimate the price elasticity of electricity as a function of contract choice. Further, I explore how the  media coverage of electricity prices affects electricity demand, both by augmenting price responsiveness and as a direct effect of media coverage on electricity demand, independent of prices. The parameters in the model are estimated using a unique and detailed Swedish panel data on monthly household-level electricity consumption. I find that price elasticities range between -0.025 and -0.07 at the mean level of media coverage, depending on contract choice, and that households with monthly variation in electricity prices respond more to prices when media coverage of electricity prices is extensive. When media coverage is high, for example 840 news articles per month (which corresponds to the mean plus two standard deviations), the price elasticity is -0.12, or 1.7 times the elasticity at the mean media coverage. Similarly, media coverage is also found to have a direct effect on electricity demand.

Ort, förlag, år, upplaga, sidor
Lunds universitet, 2017
Serie
Umeå economic studies, ISSN 0348-1018 ; 940
Nationell ämneskategori
Nationalekonomi
Forskningsämne
nationalekonomi
Identifikatorer
urn:nbn:se:umu:diva-130929 (URN)
Tillgänglig från: 2017-02-01 Skapad: 2017-02-01 Senast uppdaterad: 2020-07-08Bibliografiskt granskad
4. The effect of price on electricity contract choice
Öppna denna publikation i ny flik eller fönster >>The effect of price on electricity contract choice
2017 (Engelska)Rapport (Övrigt vetenskapligt)
Abstract [en]

I explore how households switch between fixed-price and variable-price electricity contracts in response to variations in price and temperature, conditional on previous contract choice. Using panel data with roughly 54000 Swedish households, a dynamic probit model is estimated. The results suggest that the choice of contract exhibits substantial state dependence, with an estimated marginal effect of previous contract choice of 0.96, and that the short-run effects of variation in prices and temperature on the choice of electricity contract are small. Further, the state dependence and price responsiveness are similar across housing types, income levels and other dimensions. A plausible explanation of these results is that transaction costs are perceived to be larger than the relatively small cost savings from switching between contracts.

Ort, förlag, år, upplaga, sidor
Umeå: Umeå universitet, 2017. s. 33
Serie
Umeå economic studies, ISSN 0348-1018 ; 941
Nationell ämneskategori
Nationalekonomi
Identifikatorer
urn:nbn:se:umu:diva-130931 (URN)
Tillgänglig från: 2017-02-01 Skapad: 2017-02-01 Senast uppdaterad: 2018-06-09Bibliografiskt granskad

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